Blog

​One of the biggest risks any family faces is the unexpected death of a financial provider. If you’re the breadwinner in your family, you may feel like death is an unlikely risk. That could be especially true if you’re relatively young and healthy. Death may not be a likely scenario, but it is possible. If you do pass away, your death could leave your loved ones with debt, a lack of income and other financial challenges.

You can use life insurance to minimize this risk. Unfortunately, many people don’t have life insurance because they feel it’s too expensive. A recent study by InsuranceQuotes found that nearly 40 percent of Americans don’t have life insurance.1

The truth is that a wide range of policies are available to fit every type of budget. Term life insurance, in particular, is usually affordable for most people. If you’re on a tight budget or want to minimize your premiums, term insurance could be the right strategy for you.

What is term insurance?

Term insurance provides protection for a limited period of time, such as 10 or 20 years. The period is set when you purchase the policy. Generally, the longer the period, the higher the premium. Term is often an affordable alternative because its premiums are usually lower than those for permanent insurance.

Term also doesn’t accumulate cash value inside the policy. This is a big difference between term insurance and permanent insurance. In a term policy, all of your premiums go toward the cost of insurance. That helps keep your costs down, but it also means your funds don’t accumulate inside the policy as they would with permanent insurance.

What are your options when the term ends?

The goal is that you never have to use your term policy. In an ideal world, you would still be alive when the term reaches its end. At that time, you may have a few options available. The simplest is to let the policy lapse and stop paying premiums. You wouldn’t get back any of your previous premiums, but you also wouldn’t have to pay any in the future.

You also may be able to renew your policy for a new term. However, your premium will likely be recalculated to reflect your older age. Another possible option is to convert the term policy into a permanent policy. Again, though, you’ll likely have a higher premium based on the fact that the policy is permanent and that you’re older.

Is term insurance right for you?

Term insurance is appropriate when you have a temporary need for protection. The classic example is when you have minor children in the home. Another is when you have a sizable mortgage. You can buy a term policy to stay in force while your children are dependent on you or while you have a mortgage balance.

Term could also be appropriate if you have no coverage and a limited amount you can spend on life insurance. Even if term isn’t exactly right for your needs, it’s better than having no coverage at all. If you can only afford a limited amount of premiums, term could help you get the right amount of protection.

Ready to develop your insurance strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

​Are you in the market for life insurance? That could be a wise decision for you and your family. Life insurance is an effective tool for protecting against one of life’s greatest risks—the death of a breadwinner or family provider.If you’ve never purchased life insurance before, you may be overwhelmed by the wide range of options available. How do you know which type is right for you? And how do you know how much coverage is right for you?Those are important questions, but they’re not the only choices you may face. Many insurance policies offer optional benefits called riders. These are additional features you can add to your policy. Some increase your premiums, but others don’t. The decision to choose a particular rider should be based on your unique needs and goals.Below are a few of the most popular riders and why they might be right for you. A financial professional can help you analyze your needs and develop the appropriate strategy.

Waiver of Premium

This rider is so common that it’s now often included in the base coverage of many policies. It’s a feature that waives your premiums if you ever become disabled and unable to work.1 Essentially, it’s a protection against disability, so you don’t lose your life insurance along with your ability to generate income. Even if you think disability is a remote possibility, this rider is usually so affordable that it makes sense.

Guaranteed Insurability

Your eligibility for life insurance protection is based on your age and your health. If you suffer a major health issue, like a heart attack or cancer, you may have trouble getting life insurance in the future, even if you’ve recovered from the ailment.Guaranteed *insurability is a rider you can add to your life insurance policy that minimizes that risk in the future. Assume you purchase a policy when you’re healthy and choose the guaranteed* insurability rider. Then you suffer a serious health crisis. Your rider allows you to purchase additional coverage in the future at your original health classification, without going through underwriting. It could be a very helpful form of protection.

Accelerated Death Benefit

Life insurance is meant to provide protection to your loved ones after you pass away. However, things don’t always go according to plan. It’s possible you and your family may need the death benefit before you die.This rider provides that option in the event you suffer a terminal illness. The rules of each policy are different. If your diagnosis qualifies, however, you can take a portion of your death benefit while you are battling the illness. Your family can then use it to pay for care, medical bills or any other expenses.

Return of Premium

Term insurance is often popular because it’s an affordable coverage option. It provides protection for only a limited period of time, however, and your premiums don’t accumulate as cash value inside the policy. If you outlive your policy, you may feel as though you wasted your premium payments.A return-of-premium rider allows you to get some of those premium dollars back at the end of the term. While this may seem attractive, be aware that these riders often increase the premium significantly. It may be more cost-effective to take the lower premium and simply save the difference.Ready to plan your life insurance protection strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and choose the policy that’s right for you. Let’s connect soon and start the conversation.

1http://disabilitycanhappen.org/disability-statistic/

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

​Thinking about buying life insurance soon? Trying to maximize your coverage while limiting your costs? Fortunately, a wide range of policies are available to fit any budget. You may find that a term policy is the best option for you. Or you may decide you want a permanent policy that provides lifelong protection and cash value accumulation.The type of policy is only one of several factors that influence your premium amount. Your age is another important factor. The older you are, the closer you are to the end of your life. It may be a morbid thought, but life insurers consider your life expectancy when determining your rates. Generally, you can minimize your life insurance premiums by purchasing your policy at a younger age.The other important factor in your premium amount is your health at the time of purchase. Life insurers use a process called underwriting to gauge your health and how it may impact your life expectancy. They then assign a health rating and use it in your premium calculation. A better health rating leads to a lower premium.Below are a few common questions about life insurance ratings and how they could affect your coverage and premium amount. Your financial professional can also help you choose the right policy for your needs and budget.

What are life insurance health ratings and how do they work?

Life insurance companies usually have a set of ratings groups. Although the names of these groups vary by insurer, they’re commonly referred to as things like “preferred” or “standard.” It’s not unusual for an insurer to have five or more different classifications.The healthier you are, the better your classification and the lower your premium. For instance, if you’re extremely healthy relative to others your age, you may get a “super preferred” rating, which might make you eligible for the lowest possible premium on your policy. On the other hand, if you have substantial health issues, you may get a standard rating or below, which would increase your premium.

What factors does an insurer consider to develop a rating?

Life insurers use a process called underwriting to evaluate your health. During underwriting, the insurer may request a number of tests or documents related to your health. The most basic is an application or questionnaire about your health history. If you are relatively young and buying a low-dollar coverage amount, this questionnaire may be the only thing the insurer requests.However, it’s common for insurers to also request in-person medical exams. These are usually conducted by a nurse in your home or workplace. The nurse measures your height, weight and blood pressure, and also takes blood and urine samples.If you are older, have a history of health issues or are applying for a sizable permanent policy, the insurer may request other tests. For example, it may want you to get a full physical with your physician. It may want you to take an electrocardiogram (EKG) or stress test. Or the insurer may ask for copies of your full medical records. These requests all depend on your unique history and needs.

How can you get the best possible rating?

The best way to improve your rating is to take steps to improve your health as soon as possible. You may not be able to move up from standard to super preferred in a short period of time, but it could be possible to move up one classification.If you’re overweight, try eating healthier and exercising to lose a few pounds. Take steps to reduce your cholesterol and blood pressure. Smoking is a major factor in life insurance premiums. If you have enough time before you apply for coverage, consider quitting so you can be classified as a nonsmoker. That can make a significant difference in your premium amount.Ready to protect yourself and your family with life insurance? Contact us today at Carstens Financial Group. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

​Life can change quickly, and when it does, it’s helpful to review your financial strategy. For example, when you have children, you may start exploring options to save for college. When you buy a home, you might increase your emergency savings to cover potential repairs. And as you get older, you may shift to a more conservative investment allocation.It’s often helpful to include life insurance in these periodic financial reviews. There are some life changes that represent obvious times to review or adjust your coverage. For instance, many people purchase life insurance when they have kids or buy a home. Others do so when they start a business or accept a promotion.There are other, less obvious times when it’s appropriate to review your protection. Below are three such instances. If any of these sound familiar, you may want to meet with your financial professional and determine if your life insurance strategy is still the right one.

Retirement

Many people purchase life insurance as an income replacement tool. They’re the primary breadwinners in the family, and they want their spouse and children to have financial resources if they should pass away. If you purchased life insurance for income replacement, you may think you’ll no longer need the policy after you retire. After all, you’ll no longer work and earn income in retirement.However, there are still reasons why life insurance is important when you retire. It’s likely that you may face long-term care or other costly medical services in the final years of your life. Those services could drain your assets. Life insurance can help your surviving spouse replenish their savings.Life insurance can also serve as an effective tool to leave a legacy. You could use the policy to help your children and grandchildren achieve their biggest goals after you pass away. You also may use your life insurance as a tax-efficient income vehicle.Don’t assume that life insurance is unnecessary in retirement. While you may no longer need an income replacement tool, your insurance policy could serve other important purposes. A financial professional can help you determine what changes you need to make to your coverage.

Accepting a Pension

Are you one of the fortunate individuals who will have a pension in retirement? If so, you may need to decide which payment option you want. Most plans offer some form of joint life option in which you take a reduced payment, but it covers both your life and your spouse’s.At first glance, it may seem like the joint option is the best way to protect your spouse in the event that you pass away first. However, it may be more effective to simply purchase life insurance as a protection tool. That could allow you to accept a higher pension payout. Every situation is unique, so it’s important to consult with a financial professional before you make a decision.

Divorce

Divorce impacts nearly every corner of your financial life. It’s a complex and exhausting process, so it’s easy to overlook some areas of your financial strategy. During this busy time, don’t forget to review your life insurance.You may not need as much life insurance protection after your divorce. On the other hand, if you have children, you may not be confident that your former spouse can fully support them. In that case, you may want to maintain a significant amount of coverage.Also, don’t forget to check your beneficiaries. Too many people make the mistake of keeping their former spouse on their insurance as primary beneficiary. If you do, he or she will receive the benefit upon your death, even if that’s not your intention. Make sure your beneficiaries are correct, and consider setting up a trust as beneficiary for your minor children.Ready to review your life insurance strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and objectives and determine which type of coverage is right for you. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation.

Securities and Advisory Services offered through Client One Securities, LLC Member FINRA/SIPC and an Investment Advisor. Carstens Financial Group and Client One Securities, LLC are not affiliated.​This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.